Comments on: Emergency Funds On Steroids

By: Preparing For A Layoff | Frugal Dad

Preparing For A Layoff | Frugal Dad — Fri, 08 May 2009 19:35:50 +0000

[...] I immediately slowed my debt snowball plan, only paying minimums and storing everything else in an emergency fund. When the clouds cleared (I found a new job in a new town) I used some of the money in savings to [...]

By: marci

marci — Thu, 22 Jan 2009 04:55:06 +0000

correction on above – Plan on covering your own EYES and dental … not medical and dental… sorry – too late to think!

By: marci

marci — Thu, 22 Jan 2009 04:53:43 +0000

My understanding also is that COBRA is 18 months. But a less expensive policy would be getting major medical coverage only from somewhere else… with a high deductible of $2000 or so, the price gets much more reasonable. Plan on covering your own medical and dental, and just get the insurance for the major hospital stuff, and you can find it for about $150/month or less…. At least that was what I found out when I was trying to move back home 2 years ago without a job lined up at the time. Luckily, I found the job also with health ins. so didn’t have to buy the major medical policy.

By: Frugal Dad

Frugal Dad — Thu, 22 Jan 2009 03:26:45 +0000

@Nan: Good points, DavidK…thanks. Nan, check out the limits on COBRA–I think it was recently extended to 18 months of coverage, depending on scenario. If you are a member of Sams Club or Costco check out their group benefits plans. More reasonable than COBRA, typically.

By: DavidK

DavidK — Thu, 22 Jan 2009 03:12:48 +0000

@Nan, yep, what FrugalDad said. CORBA will cost what you and your employer pay combined — except that only you will be paying it after your employment has ended. I believe that CORBA can only be extended up to 90 days though. It is usually only enough time to find another job or enough time to get a personal policy and get through the 30-45 day waiting period before coverage begins. Usually if you are laid off, the benefits paid for by the company are extended until the next time the premiums are due, which is the beginning of the next month. So if you lose your job near the beginning of the month, you can stretch coverage out to almost 4 months.
You can find Blue Cross/Blue Shield for personal health/Rx coverage for reasonable rates if it does come down to that.

By: Frugal Dad

Frugal Dad — Thu, 22 Jan 2009 03:05:17 +0000

@Nan: Continuing benefits under COBRA is very expensive–think paying both sides of your insurance premium on your own (what you currently pay plus what your employer contributes, which is usually more). Still, this might be a good alternative to finding an individual policy in a pinch. I would find out how much COBRA would cost in your current situation and include that in my 6-month emergency fund.

By: Nan

Nan — Thu, 22 Jan 2009 01:20:15 +0000

I am wondering if any of you have any thoughts about health insurance while unemployed? COBRA insurance is pretty expensive – how do we estimate that into our 6-mth Efund? Thanks!

By: Slinky

Slinky — Wed, 21 Jan 2009 23:20:40 +0000

Currently at $1500, will be $2500 within the next two months because the economy is making me somewhat nervous. I live off of what I made the month before so I’ve always got an extra month’s income as well. Between the two, that should be enough for bare bones expenses for 3-4 months.

My current end goal for my eFund is $15k, but I may have to revise that upwards as my standard of living increases.

By: Tracy

Tracy — Mon, 19 Jan 2009 13:00:59 +0000

I think Dave Ramsey’s initial plan of $1000 is to get people (like me!) into the saving mindset and get things rolling. My husband and I started our second Financial Peace University classes about a year ago. This time, we managed to save $1000 several times throughout the year that got eaten up pretty quickly (usually by car repairs). By the end of the year, we had spent $3483 from the EF and it was down to 0. Again. While $1000 may not be enough, it is a cushion in case of life happening and has been a huge blessing to us. For those people like us who have never managed to save anything before, it is a realistic goal that we can meet and the peace it brings. Well, it’s amazing.

By: Meaghan

Meaghan — Sat, 17 Jan 2009 23:38:49 +0000

I absolutely agree that $1000 is not enough for those unexpected expenses and repairs that can pop up. I strive to keep 3 months worth of expenses in my savings account.